Cut-price subscription deals for live Premier League football could be available on digital terrestrial and cable television by the start of the new season in August, after BSkyB today reached an interim settlement with three rival pay-TV operators.

The deal struck by the satellite broadcaster is limited to providing just BT Vision, Virgin Media and Top Up TV with discounted wholesale deals for Sky Sports 1 and Sky Sports 2, which carry live Premier League football.

BSkyB has today dropped fight to get the Competition Appeals Tribunal to implement a "stay" to postpone the implementation of Ofcom's ruling that it must cut the amount it charges all rival pay-TV operators to offer Sky Sports by more than 20%.

Under Ofcom's ruling BSkyB would have had to have offered its prime sports content to any competitor in the market.

"Often these things end up being settled out of court, so to speak, and there have been a series of discussions about how to reach an agreement," said a senior executive with knowledge of the deal. "The deal will see the 'stay' definitely not put in place and concessions will be made that will mean it [Ofcoms ruling] will not apply to all platforms."

Despite today's deal BSkyB intends to mount a case to overturn the Ofcom ruling that it must slash the cost of SkySports 1 and 2. It will present the appeal to the CAT in a matter of weeks, but its rivals will be able to take advantage of those new prices while it argues its case.

The CAT has brokered a deal under which Virgin Media, BT and Top Up TV can all take advantage of the reduced wholesale price for the two Sky Sports channels, but they must place the difference between the new regulated price and Sky's original wholesale price in a so-called "escrow" account. If Sky wins its case, which is unlikely to be heard until September, then the money will be handed over to the satellite broadcaster as it will be able to put its prices up again. If Sky loses, the cash will be returned to the three companies.

In a statement issued today, Sky said this deal will "initially apply only in respect of BT, Top-up TV and Virgin Media on DTT and cable".

The CAT has ruled that any other broadcaster who wishes to offer Sky's channels at the new Ofcom rate will be able to ask the court directly to join the escrow regime. The regime, however, only applies to companies that wish to offer Sky Sports 1 and 2 on digital terrestrial and cable TV.

The deal is a victory for Ofcom, which stated in its March 31 ruling that Sky must start offering the new prices by 14 May.

A Sky spokesman said: "We are pleased to have been able to put forward an agreement which provides substantial protection against the short-term impacts of Ofcom's decision. We remain fully focused on our substantive appeal, which will be filed with the CAT in due course."

Ofcom said the deal was good for the UK pay-TV market and that it would staunchly defend the ruling against BSkyB's appeal.

"The agreement is very good news for consumers," said a spokesman for Ofcom. "It means that Sky will supply Sky Sports 1 and 2 to BT, Virgin Media and Top Up TV on digital terrestrial TV and cable on Ofcom's regulated prices. We look forward to the next steps in the process, including the formal appeal where we will defend the decisions we have taken, which are in the interests of UK consumers."

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